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Bajaj Finserv Quarterly Results Q3 FY22

22 January 2022
4 minutes

Bajaj Finserv Limited (BFS), the holding company of the Bajaj Group, declared its Q3 FY22 result on 20 January, 2022. 

The company posted consolidated net profit at Rs.1,256 crores, down 2.6% YoY from Rs. 1,290 crores. Total income for the company came in at Rs. 17,620 crores, up ~10.4% YoY from Rs. 15,960 crores. Tax expenses for BFS rose to Rs. 899 crores from Rs.697 crores for the corresponding period last year.

BFS and its subsidiaries – Bajaj Finance Limited (BFL), Bajaj Allianz General Insurance Company Limited (BAGIC), and Bajaj Allianz Life Insurance Company Limited (BALIC) posted net profits at Rs. 2152 crores, Rs. 304 crores and Rs 88 crores, respectively. 

The company states that the economic conditions were better in Q3 FY22 compared to Q2 FY22, though key indicators like auto sales remain muted. The general insurance business was impacted as the quarter witnessed adverse weather events. Emergence of the Omicron variant at the end of Q3 has worried the company. Even under such circumstances, the company is committed to growth. 

The BFS script traded nearly 4% down this afternoon, as it remained under severe market pressure from losses reported. 

Highlights

  • Consolidated income grew to Rs. 17, 620 crores from Rs. 15,660 crores, up — YoY
  • Economic conditions favoured vertical growth. 

Segment-wise hits

Bajaj Finance Limited (BFL) 

  • The highest ever quarterly growth was observed for core AUM at Rs. ~ 14,700 crores for Q3 FY22 
  • Total income increased 28% YoY from Rs. 6,659 crores to Rs. 8,535 crore 
  • PAT stood at an impressive Rs. 2,125 crores up nearly 85% on account of robust AUM growth, higher net interest income, and better asset performance. 
  • AUM, increased 26% YoY from Rs. 1,43,550 crores to Rs. 181,250 crores 
  • Gross NPA and Net NPA  stood at 1.73% and 0.78% 
  • Capital adequacy ratio (including Tier-II capital)  for the quarter ended December stood at 26.96%. The Tier-I capital stood at 24.44%. For Bajaj Housing Finance Limited (BHFL), the capital adequacy ratio (including Tier-II capital) stood at 19.37% 

Bajaj Allianz General Insurance Company Limited (BAGIC) 

  • Net earned premium for Q3 FY22 stood at Rs. 1,930 crore, up 5% YoY from Rs. 1,838 crore
  • Despite adverse weather events and higher losses on crop insurance, BAGIC recorded an underwriting profit of Rs. 5 crores
  • For the quarter ended December, the solvency ratio was recorded at 333%, well above the minimum regulatory requirement of 150%. 
  • AUM  (cash and investments) for Q3FY22 stood at Rs. 23,977 crores, up ~ 10% YoY from Rs. 21,873 crore 

Bajaj Allianz Life Insurance Company Limited (BALIC)

  • New business premium for Q3 FY22 was recorded at Rs. 2,377 crores, up 39% YoY from Rs. 1,706 crores 
  • Individual rated new business premium stood at Rs. 1,033 crores, up 68% YoY from Rs. 613 crores. 
  • Renewal premium for Q3 came at Rs. 1,702 crores, 18% up YoY from Rs. 1,441 crores
  • Gross written premium increased by 30% YoY to Rs. 4,079 crores from Rs. 3,147 crore 
  • The solvency ratio was recorded at a healthy 604% against the minimum regulatory requirement of 150%.
  • AUM (represented by total investments) stood at Rs. 83,194 crores v/s ~ Rs. 70,295 crores, up 18% YoY.  

Misses 

  • BFS reported a loss for this quarter, down 2.6% YoY from Rs. 1,290 crores to Rs. 1256 crores
  • Tax expenses rose 28% YoY to Rs. 899 crores from Rs.697 crores
  • Claim ratio for BAGIC increased to 69.6% in Q3 FY22 v/s 66.6% Q321, reasons attributable to heavy rainfall in Uttarakhand and Tamil Nadu and high losses on crop insurance. 
  • PAT reduced for BAGIC by Rs. 26 crores from Rs.330 crores to Rs. 304 crores. 
  • PAT for BALIC reduced to Rs. 88 crore v/s ~ Rs. 118 crore in Q3 FY21, reasons attributed to higher new business strain. 

Other things to know about BFS

  • The company is primarily engaged in business and financial services like insurance, wealth management, etc. through subsidiaries and joint ventures
  • BFS is also engaged in generating power through wind turbines
  • It sits on a market cap of Rs.2,73,597 crores, having a P/E ratio of 64.8
  • The ROCE and ROE of the company stand at 11.9% and 13.3%, respectively
  • Bajaj Finserv Limited has delivered a 19.14% CAGR over the past 5 years.
  • Stock price CAGR for a year stands at an impressive 102%

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